LONDON: UK tax on earnings of big tech companies like Google, Facebook and Amazon in 2020 risks becoming permanent as stopgap measure pending international tax deal, tax says a group of experts said Wednesday.
The levy was introduced after concerns over the low taxes some big tech companies were paying, and raised £358m ($447m) in its first year.
The Chartered Institute of Tax Accountants (CIOT), which represents tax professionals, said there was little sign of a breakthrough in international negotiations brokered by the Organization for Economic Co-operation and Development, despite major deals in 2021. .
The CIOT said there is a real risk that taxation could become effectively permanent without an agreement on how taxing rights should be distributed that all major trading partners can sign.
“A revenue tax like this is a blunt instrument that fails to accurately represent the taxation of profits made in the UK,” said John Callinan, CIOT’s director of public policy. “Inevitably, we will overtax some companies and undertax others.”
UK Parliament’s Public Accounts Committee said in a separate report released on Wednesday that the tax had run “relatively poorly” but had beaten expectations by 30% in its first year, with 90% outperforming 5%. said they were from one business group.
The tax is expected to raise around £3 billion by 2024-25, it noted.
This tax is set at a rate of 2% of applicable turnover, not profits, and operates a social media platform, search engine or online marketplace with revenues exceeding £500m, of which £25m imposed on the company. I’m from a UK user.
($1 = £0.8001)
